REER (Real Effective Exchange Rate) is:

CA Foundation · Business Economics · MTP · January 2026
REER (Real Effective Exchange Rate) is:
(A) A. Weighted average of forward exchange rates
(B) B. Nominal rate adjusted for interest
(C) C. Nominal effective exchange rate adjusted for inflation
(D) D. None of these

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. Nominal effective exchange rate adjusted for inflation

Topics: International Trade

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